Semiconductor Stocks Pounded After Altera Warns on Revenue

Now that semiconductor maker Altera(ALTR Quote) has told the world it won't meet fourth-quarter revenue forecasts, a group of analysts put out the word that the company won't meet their estimates. Right.

ABN Amro, Goldman Sachs, Lehman Brothers and Credit Suisse First Boston cut their earnings estimates on the specialty chipmaker, which lowered its fourth-quarter revenue forecast last night, citing sluggish November sales.

ABN Amro cut its 2000 earnings view to 97 cents from $1.02 a share, its 2001 EPS view to $1.20 from $1.55 and its 12-month price target to $40 from $60. Goldman lowered Altera's fourth-quarter EPS view to 27 cents from 32 cents and its 2001 view to $1.25 from $1.55. Lehman lowered Altera's 2000 estimate to 97 cents from $1.02 and its 2001 view to $1.20 from $1.40. Credit Suisse also reduced the company's fourth-quarter earnings estimate to 26 cents from 33 cents a share.

Robertson Stephens and Deutsche Banc Alex. Brown went further. Robertson Stephens cut the stock to a long-term attractive from a buy, while Deutsche Banc Alex. Brown cut the stock to a buy from strong buy and lowered its fourth-quarter earnings estimate to 27 cents from 32 cents and its 2001 view to $1.30 from $1.60.

Shares of Altera were recently down 11.8%, or $3.06, to $22.94 in Nasdaq trading.

In a group move on semiconductor stocks, Credit Suisse also hacked its ratings on Lattice Semiconductor(LSCC Quote), Xilinx(XLNX Quote) and Fairchild Semiconductor(FCS Quote) to buy from strong buy.

Shares of Xilinx recently tumbled 7.1%, or $3.06, to $40 in Nasdaq trading. Lattice had fallen $1.69, or 9.7%, to $15.75, and Fairchild was recently lower by 11.4%, or $1.75, to $13.63 in composite trading.

In the report, CSFB cited the slowdown in the wireless and PC markets over the last four months, the uncertainty in wireline forecasts and the hoarding of components resulting in inventory overhang, and said it believes the semiconductor device companies "are once again about to run into a wall."

Ratings on Interstil(ISIL Quote), Microchip Technology(MCHP Quote) and Silicon Storage Technology(SSTI Quote) were also cut to buy from strong buy.

Interstil shares were down 17.8%, or $4.75, to $22.06, Microchip was lower by 2.7%, or 63 cents, to $22.41, and Silicon Storage dropped 12.4%, or $1.69, to $11.94 in Nasdaq trading.

Among other big chip names, Intel(INTC Quote) was recently down 10%, or $4.31, to $38.63 while Advanced Micro Devices(AMD Quote) lost $2, or 11.7%, to $15.06.